Chairman Barney Frank and HUD Secretary Preston have come to an amicable agreement regarding the continuation and use of Down Payment Assistance Programs.
HUD never liked Down Payment Assistance, but did want Risk Based Pricing to allow them to better manage FHA's overall security when Insuring Mortgages. This risk based pricing was and still is, to go away October 1st, 2008. Reverting back to the original standards set for insuring FHA mortgages.
Barney Frank has always supported Down Payment Assistance Programs (DPA's) and thought they had a place in the market to help those desiring to purchase a home of their own and live the American Dream, even when it seemed to be out of reach due to the lack of neccessary funds, i.e. Down Payment, needed to close / settle.
It appears that they have agreed to some terms that will allow Risk Based Pricing and the use of Down Payment Assistance.
Chairman Franik said he believe the New Bill will pass the House with know problem since it is now supported by the HUD Secretary Preston.
It must still be submitted to the Senate and Passed, then reconciled, and ultimately signed into law by the President.
None the less, this is some great news regarding the future of Down Payment Assistance.
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I know I say I don't like to try predicting anything in real estate, but having the DPA idea revived is something that wouldn't surprise me at all. Let's see what happens!